World
        

Economy

Owner of Sweden's Saab can't pay wages

Updated: 2011-06-23 16:23

(Agencies)

Twitter Facebook Myspace Yahoo! Linkedin Mixx

Owner of Sweden's Saab can't pay wages
Icicles hang from the trunk of a dismantled Saab vehicle in the courtyard of a service station in Budapest in this December 22, 2009 file photo. [Photo/Agencies] 

STOCKHOLM - Swedish Automobile said Thursday it cannot pay the wages of staff at wholly owned subsidiary Saab, as it struggles to find funding from investors.

Related readings:
Owner of Sweden's Saab can't pay wagesYoungman agrees to buy equity stake in Saab
Owner of Sweden's Saab can't pay wagesChina's Hawtai Motor comes to Saab's rescue

The news is the latest blow to the Swedish car brand whose production has been idle for weeks while it has searched for money to pay suppliers.

Market watchers have long been skeptical about Saab's survival, but the brand's spokesman Eric Geers insisted the group is not headed for bankruptcy.

"We're saying that we don't have funding to pay out salaries, but we're working day and night to find a solution," he said. "We're assuming we'll find a solution."

He could not say when salaries are expected to be paid out again.

Swedish Automobile - which recently changed its name from Spyker - said it is currently in talks with various parties to solve the financial difficulties, but warns that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained."

The talks include selling off Saab's property and then leasing it back to raise cash.

Meanwhile, Saab itself is attempting to reach a financial deal to continue to receive parts and components to resume production after it was halted for weeks because it couldn't pay suppliers. In the first shutdown the plant was closed for almost seven weeks, and in the latest closure it has been down for about three weeks.

Saab was sold to Swedish Automobile for $74 million in cash plus $326 million worth of preferred shares by General Motors last year.

During its 10 years with GM, Saab struggled to make a profit.

Specials

My China story

Foreign readers are invited to share your China stories.

Pret-a-design

Though Elisabeth Koch did not attend the Aprilweddingof Prince William and Kate Middleton in London, her tailor-made hats might have.

Mom’s the word

Italian expat struggles with learning English and experiences the joys of motherhood again.

Suzhou: Heaven on Earth
The sky's the limit
Diving into history